Friday, April 22, 2016

Government had issued a notification dated
10th February 2016 regarding rules for withdrawal from EPF Funds by the
members. Under the revised rules, the employee was permitted to withdraw the
employees’ share from the fund (which is 12% of the wages). However, it was
prescribed that the employers’ share of contribution towards the Provident Fund
(which is 3.67% of wage) would be allowed to be withdrawn only at the age of
retirement (58 years). The objective was to provide a minimum social security
to the workers at the time of retirement. It was noticed that over 80% of the
claims settled by EPFO belonged to pre-mature withdrawal of funds, treating the
EPF accounts as savings accounts, and not a Social Security instrument.

In order to address the issues
the amendment stated above was carried out with the consent of Trade Unions and
with the intention of promoting a decent accumulation of provident fund for the
members at the end of their working lifetimes.

However, considering the
representations received from various quarters and after consultations with the
various stakeholders, Minister of State (IC) Labour and Employment, Sh Bandaru
Dattatreya announced that the government has decided to withdraw the said 10th
February 2016 Notification with immediate effect.

Accordingly, the workers are
now allowed to withdraw the entire amount from the provident fund as per
existing provisions of the EPF Scheme 1952 including the employers’ share of
3.67%. (Release
ID: 139046) 21st April,2016.